The Retirement Rules Changed in January and Nobody Sent You a Memo

Four numbers changed this year. Your employer sent a plan document nobody read. Here’s what’s actually in it.

I’m going to give you the figures straight from the IRS and SSA, link the primary sources, and tell you what I think it means. What I’m not going to do is tell you what to do with your money - I’m not licensed to, and anyone doing that for free in a newsletter should worry you.

Number one: $24,500

The employee contribution limit for 401(k), 403(b), most governmental 457 plans, and the federal Thrift Savings Plan is $24,500 for 2026, up from $23,500 in 2025.

That’s a $1,000 bump. If you’re maxing out and haven’t adjusted your payroll election since last year, you’re leaving that thousand on the table by default. Payroll systems don’t usually auto-raise you to the new ceiling - they keep deferring whatever percentage or dollar figure you set, and a fixed dollar election will simply stop short.

Ten minutes in your payroll portal. Do it before the next pay period, because the limit is annual but the contributions are per-paycheck, and you can’t retroactively fund January in December.

Number two: $8,000

If you’re 50 or older - which is most of this list - the standard catch-up contribution is $8,000 for 2026, up from $7,500.

Stack that on the base limit and you can put $32,500 into your plan this year.

Worth sitting with: a 52-year-old contributing the full $32,500 instead of the base $24,500 is moving an extra $8,000 a year into tax-advantaged space. Over the fifteen years until 67, that difference compounds into real money - and it’s the single largest lever most people in this age bracket aren’t pulling.

Number three: $11,250 - the window nobody tells you about

This is the one I’d circle.

Under SECURE 2.0, there’s a higher catch-up limit for people aged 60, 61, 62, and 63. For 2026 that figure is $11,250 instead of $8,000.

Combined with the base limit, someone in that four-year window can contribute $35,750 in a single year.

Read that again, because the design is strange and easy to miss: it’s not “60 and older.” It’s a four-year window that opens at 60 and closes after 63. At 64 you revert to the standard $8,000 catch-up. It is, functionally, a use-it-or-lose-it provision, and it lands exactly when a lot of people have finally finished paying tuition and have cash flow for the first time in two decades.

If you’re 58 or 59 right now, this is the thing to be planning around. Four years, roughly $13,000 of extra shelter over the standard catch-up. If you’re already 64, I’m sorry, and you should know it existed.

Number four: $150,000 - the one that costs you

Here’s the rule that raises taxes without anyone calling it a tax increase.

Under SECURE 2.0, participants whose prior-year wages from that employer exceeded $150,000 must make their catch-up contributions on a Roth basis - after-tax - rather than pre-tax.

The mechanics: you lose the current-year deduction on that catch-up money. An 8,000-dollar catch-up that used to reduce this year’s taxable income no longer does. The money grows tax-free and comes out tax-free later, which is a genuinely good deal in the long run, but the bill arrives now.

Two things to know. First, the IRS issued final regulations effective November 17, 2025, and those regulations’ catch-up provisions generally apply to taxable years beginning after December 31, 2026 - meaning plans have some room in how they administer this for the current year. Second, your plan may include a deemed Roth election, which means it can automatically treat your catch-up as Roth without asking you, provided that’s written into the plan document.

Translation: check your plan document, not your assumptions. If you’re over $150,000 in prior-year wages from that employer and you’ve been counting on a pre-tax deduction for your catch-up, that arithmetic may not hold.

And the number that dwarfs all four

Everything above is worth thousands. This one is worth a percentage of every check for the rest of your life.

If you were born in 1960 or later - all of Gen X - your Social Security full retirement age is 67.

Claim at 62: you receive 70% of your full benefit. Permanently.
Claim at 67: 100%.
Claim at 70: 124%, thanks to delayed retirement credits of roughly 8% per year past full retirement age.

Credits stop accruing at 70. Waiting past your seventieth birthday buys you nothing.

The spread between claiming at 62 and claiming at 70 is enormous - 70% versus 124% of the same underlying benefit. That’s not a rounding difference, it’s nearly double.

I’m not going to tell you to wait until 70. That decision depends on your health, whether you’re still working, marital status, survivor benefits, and whether you need the money. Those are real constraints and the “always wait” crowd tends to ignore them. But the decision should be a decision, made with the table in front of you - not a default triggered by a bad quarter or a layoff at 62.

The actual to-do list

Log into payroll. Confirm your election reaches $24,500, plus $8,000 catch-up if you’re 50 or older.
If you’ll be 60 to 63 in any year through 2029, calendar the window now.
If prior-year wages exceeded $150,000, ask HR one question: does our plan apply a deemed Roth catch-up election?
Pull your Social Security statement at ssa.gov and look at the actual numbers for 62, 67, and 70. Not the estimate you have in your head.

None of this is complicated. All of it is boring. That’s precisely why it goes undone, and why the people who quietly do it end up meaningfully ahead of people who earned the same money.

Not financial advice. I’m not an advisor, and your situation has details this doesn’t cover. The sources below are primary - read them yourself before you act.